New Figures Show '92 Economy Was More Robust than Believed

By Robert A. Rosenblatt and Greg Miller
Los Angeles Times

WASHINGTON

Economic growth was far more robust during the final year of George Bush's
presidency than previously reported, and the 1990-1991 recession was much
milder than generally believed, the Commerce Department said Tuesday.

The changed numbers, which represent a more accurate survey of activity at
the nation's retail stores and shopping malls, as well as updated corporate
tax returns, show that consumer spending was substantially more buoyant in
the months preceding Bush's defeat in November 1992 than believed at the
time.

Viewed alongside other new Commerce Department figures showing economic
activity this year, the revisions overturn conventional beliefs about the
nation's economy under Bush and the man who defeated him, President
Clinton. Instead of showing an economy improving rather steadily from the
1990-91 recession, the latest numbers indicate that the economy rebounded
sharply under Bush and has slipped back to a much slower rate under
Clinton.

"It clearly shows that the perception is more important than the reality,
that spin control is more important than the actual number," said Martin
Regalia, chief economist at the U.S. Chamber of Commerce.

The economy in 1992 "was doing significantly better than the Democrats were
saying, but then the Democrats quit saying that the minute Clinton got
elected," Regalia noted.

Michael Penzer, senior economist at Bank of America in San Francisco, said,
"There must be people in the White House this morning (saying), `Thank God
these numbers weren't released during the election.' "

The revised numbers show that the nation's output of goods and services
grew 3.9 percent from the fourth quarter of 1991 to the fourth quarter of
last year, substantially higher than the original figure of 3.1 percent.
The 3.9 percent growth was the highest since a 5.1 percent rate of
expansion in 1989, though still well below the highs of 8 percent in the
boom years of the mid-1980s.

During the recession, which ran from July 1990 through March 1991, economic
output -- formally called the gross domestic product, or GDP, -- declined
at an annual rate of 2.1 percent, a slump far less than the earlier
estimate of 2.9 percent.

Commerce officials emphasize that the revisions, some of which are among
the biggest ever made by government statisticians, are based on more
precise data than was available when the initial announcements were made.
In particular, they reflect the increased role that discount superstores
and mass merchandising outlets play in the retail market.The new numbers
also demonstrate the limited ability any president, whether Democrat or
Republican, has in significantly changing the direction of the economy.
They also highlight the risk involved.

"It really makes the implementation of any kind of economic policy
extremely hazardous in the sense that the numbers on which the policy are
based are often wrong and subject to substantial revision," said economist
Norman Robertson, an adjunct professor at Carnegie-Mellon University in
Pittsburgh.